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Robinhood Commision Free Brokerage App: Let’s All Join The Stock Market Game!
Robinhood is brokerage app that allows for commission free trading. Yes, I know – free commission, there has to be some fine print on there somewhere right? Wrong. It really is free – when you make a trade it even says Commission Fee $0 and there is no minimum purchase amounts. Gotta love it.
A while ago I decided I’ve had enough of the rat race and began a game plan for early (or semi) retirement. Part of my plan included an income stream from investments but I didn’t want to put out more money than I had to. I already had a few stocks under my belt that I was playing the ‘buy and hold’ game with but I wanted to give swing trading a try without involving my ‘buy and hold’ stocks. I did as much research as I could about all the fees associated with trading stocks and stumbled upon this article by Nerdwallet rating Robinhood as a great brokerage app. I was won over by the article and after doing more research, found there weren’t too many negative reviews as compared to some other brokerage firms.
So first thing is first, sign up. But not through a website, oh no dears – through their app only. I download the free app (which is pretty looking with a feather) and flew through the registration. And then wait for the application to be reviewed? I never traded through a brokerage before, I usually do the ‘buy one share’ and then I’m grandfathered in to continue buying shares or selling shares directly through the company. So having my application reviewed was a new one to me.
So I waited . . . and waited . . . . and got teaser emails . . . . and waited . . . and waited some more . . . then I was like enough. According to their FAQ’s, acceptance is immediate and if the application is needing further review then it will be a maximum of five days. Well, it was going on three weeks and nothing. So I decided to shoot them an email which I was pretty sure would have a one week response time. But, I was delightfully surprised. I sent my email on a Friday night, received an automated response over the weekend, and then received a ‘true’ response advising further identification is needed. Okay, first – there was nothing in the application requesting identification by means of a driver’s license, passport, etc. And second, why wasn’t there an alert when I logged into the app that this information was needed besides the routine ‘Application pending’ message that greeted me every time I logged into the app?
But reminder to myself, free trading – let it go and follow instructions. So I log back into the app where all of a sudden – now I have an alert asking to take a photo of my driver’s license for further identification. So I snap a pic of the front and back of my driver’s license with my camera phone and send it over. I get a thank you email and to allow for further processing. Wow, great – another three weeks of this I thought to myself. But three weeks turned into three days and I was approved!
Happy happy joy joy, but wait – now I have to wait for the soft deposits into my credit union account for bank verification. There’s a list a banks provided when you’re adding your banking information, and the only requirement is to log in using your existing user id and password for your online banking site for instant verification. Of course, my credit union wouldn’t be listed so I had to take the soft deposit route. I entered my banking information on Friday afternoon and Monday morning I already had my two deposits! Much faster than I was expecting and thrilled.
Time to start shopping for stock purchases – well, more like time to purchase since I already did my research and picked out my starting line up during my waiting period. Ugh – now I have to do a transfer from my credit union to fund my Robinhood account. If it’s anything like Paypal – I was expecting another two to three business days. Wrong again – happily wrong again. I enter the amount I wanted transferred and it was available for immediate trading. Sweet! I know on the back end its takes 4 to 5 days for the funds to transfer but it was cool they allowed you to begin trading while the transfer is in route. I bought my starters – so easy, so disgustingly easy was the purchase. Type in the ticker number, click buy, click the amount of shares you want, review your total amount (with the lovely Commission Fee: $0) and slide up to trade!
This app is perfect for me, as much as I would love to day trade I don’t have time to sit in front of a computer to catch the profits. Instead, I can trade every few days during my lunch break (or during boring staff meetings), and easily keep track of my portfolio. This app even allows for limit orders which is another great accommodation for someone like myself that cannot devote much time to watching the share prices.
Although it has all its benefits, I can see where this app may be dangerous in the wrong hands. It’s so easy to buy buy buy since the funds are instantly available after a transfer from your account. This app is seriously addictive (you’ll want to watch the prices change up and down, turn green for profit and red for loss – and the layout is so darn pretty on top of that), and much like a gambler with no self-control, if you don’t know when to stop – this freebie can actually cost you much more than commission fees. Another drawback, which really isn’t that much of a drawback – they require deposits to sit in your Robinhood account for at least 5 business days and funds from sales to sit in your Robinhood account for up to 4 business days before transferring to your bank account. Getting my money in 24 hours with a chunk of it going to commission fees versus getting all of it a few days later – patience is a virtue right? Happy trading everyone!